Nature and man are the primary factors in production. The tremendous forces of nature are as ready to destroy as to create the material forms which man desires. Man's part in the productive process is to so use his puny strength in directing the mighty forces of nature that the results will be desirable rather than harmful. Man has the choice of using his feeble strength directly and immediately upon the natural forces, or he may apply it indirectly through a long series of processes to accomplish the same end. It is the choice between moving a large stone with his hands alone and moving it with a crowbar. In one case he accomplishes little with a mighty effort; in the other case the stone moves readily in response to a lighter force applied through a longer period of time.

This is sometimes illustrated by the case of the peasant who lived in a hut some distance from a spring. In order to quench his thirst he made many trips a day to the spring, but in the course of time it occurred to him to make a bucket in which to carry water to the house. Accordingly he cut down a tree and hollowed out a section of it and fashioned a bucket. Then by going to the spring once a day he was able to satisfy his need for water. He secured water, not by the direct process of going for it whenever he wanted it, but by the roundabout process of making a bucket which would hold a day's supply of water. During the time that he was making the bucket he expended much time upon it, but in the days and weeks that followed he more than saved the time thus spent, because he saved several journeys to the spring each day. Soon, however, he discovers a way to save even the time required to go to the spring with his bucket. Then he hollows out logs and places them end to end so that they convey a stream of water from the spring to his house. When he has finished this task he has a constant supply of water at the house without being under the necessity of going to the spring at all. This is a much more roundabout process of securing the water than was the bucket method. It costs him much more time and effort to install it but when it is in operation it proves to be still more economical.

Roundabout methods of production are capitalistic methods, and the things that are produced in the roundabout process not for their own sakes, but in order to aid in the production of other things to satisfy man's wants, are capital. The bucket and the wooden trough and the instruments that had to be made before these could be constructed were capital. They were productive capital in the social sense.

Capital in this sense has been defined as "the complex of intermediate products which appear on the several stages of the roundabout journey." A simpler definition of productive capital is goods which have been produced and which are intended to be used in further production.

63. Land Is Not Capital

Land is often referred to as capital and in many respects it is very much like acquisitive capital as we have defined it. But because land is limited in quantity as compared with capital, and because it has certain social and economic functions to perform in a special way, it seems best to reserve it for a special treatment and to distinguish between land and acquisitive capital. Land is not productive capital as we have defined that term because land is not the result of economic production.1